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Table of Contents

Lead Story

Healthy relationships build vibrant businesses

Dale S. Laszig

News

Industry Update

Fed accelerates fast payments in 2017

Payments industry addresses ADA compliance

OCC considers controversial fintech charter

Retail, payments find unity at NRF 2017

Features

Emerging markets fuel smart-device surge

Views

Mobile and the democratization of banking, payments

Patti Murphy
ProScribes Inc.

Interview with industry pioneer Bill Melton

Brandes Elitch
CrossCheck Inc.

Payment trends for 2017

Kirsty Tull
BillPro Pty Ltd.

Education

Street SmartsSM:
Understanding merchant processing

John Tucker
1st Capital Loans LLC

Know the risks before processing overseas

Theodore F. Monroe
Attorney at Law

Lessons from the past that apply today

Jeff Fortney
Clearent LLC

Your EMV transition: It gets better

Bob Olson and Naga Jagadeesh
ThoughtFocus

Company Profile

Electronic Payments Inc.

New Products

Enterprise-scale, adaptable mPOS solution

iSMP4 Companion
Ingenico Group

Self-service payout solution for global ecommerce

Hyperwallet Pay Portal
Hyperwallet Systems Inc.

Departments

Letter from the editors

Readers Speak

Resource Guide

Datebook

A Bigger Thing

The Green Sheet Online Edition

February 13, 2017  •  Issue 17:02:01

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Fed accelerates fast payments in 2017

Due to changing consumer behavior and advances in mobile communications, payments analysts expect real-time payments to become a reality in 2017. The Faster Payments Task Force, led by the Federal Reserve in collaboration with private sector businesses, financial institutions and government agencies, is working toward that end. A progress report published Jan. 26, 2017, provides insights on the group's progress standardizing and implementing real-time payments and automated clearing house (ACH) schemes.

Esther George, President and Chief Executive Officer of the Federal Reserve Bank of Kansas City, has led the payment system improvement initiatives on behalf of the Federal Reserve. "The Fed's priority is to advance improvements that are in the public interest so that consumers and businesses alike have access to efficient, real-time and highly secure payments in the United States," she said. "Through a number of collaborative efforts, the industry is making real progress on all fronts, and we're expecting to achieve a number of significant milestones in 2017."

Five key strategies

The faster payments initiative originated in 2015, when the Fed published Strategies for Improving the U.S. Payment System, which detailed a multiyear plan focused on improving speed and operational efficiencies across the financial services ecosystem. Following are five underlying strategies designed to move the initiative forward:

  1. Stakeholder engagement: This involves an online stakeholder community of 4,000 members who actively participate in research, webinars and ongoing dialog.
  2. Effectiveness criteria: The task force established criteria for proposing and assessing approaches to faster payments. It solicited and received 22 proposals from participants; 19 were approved for further review.
  3. Payment security: The Secure Payments Task Force was established in April 2015 to advise the Fed on a range of issues related to fraud management, detection and monitoring. Their guidance and participation will help ensure that new payment schemes meet and exceed compliance guidelines and protect sensitive data.
  4. Payment efficiency: The Fed is working with the Business Payments Directory Association and Business Payments Coalition E-invoicing Work Group to improve efficiencies in invoice, payment and remittance schemes. Joint efforts with NACHA – The Electronic Payments Association, The Clearing House, the Business Payments Coalition Vendor Forum Education and Promotion Work Group and ISO 20022 Education and Promotion Work Group are focused on implementing the ISO 20022 Standard and educating consumers and vendors about resources designed to support same-day ACH and marketplace integration.
  5. Enhanced Federal Reserve services: As the Fed continues to identify secure, sustainable approaches to efficient, immediate payments, it is focusing on Same Day ACH, directory services and enhanced risk management tools. Significant advances have been made in identifying obstacles and gaps that could impede progress.

More to come

The Faster Payments Task Force plans to continue to identify a path forward for improving payment identity management practices and standardized definitions for fraud and risk data. Additional details, including a framework for risk assessment and protection of sensitive data, will be shared in Part Two of its progress report.

"Protecting payment systems and transactions has become a critical function for central banks, financial institutions and technology providers as sophisticated cyber threats have increased in size and scale throughout the world," said Jerome H. Powell, Federal Reserve Board Governor and co-chair of the Faster Payments Task Force oversight committee.

The Federal Reserve invites payments industry stakeholders to join its extended payments improvement community. "Momentum across the payments industry continues to be strong, resulting in substantial progress on each of the identified strategies for improving the U.S. payment system," report authors wrote. "To help ensure that you receive updates and information as it becomes available, join the FedPayments Improvement Community."

The report is available at https://fedpaymentsimprovement.org/wp-content/uploads/progress-report-january-17.pdf.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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